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lean banking case study

lean banking case study

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... During a case study the implementation of LEAN principles has been exemplified in business processes of a particular Latvian IT company. This generated a self-funding, Phase II implementation work plan. Applying Lean thinking in the Food Supply Chains: A Case Study The purpose of the study is to examine the adoption and implementation of lean thinking in food supply chains. You read right: more than half of the knowledge workforce was spending its time correcting and completing inbound work products. Handpicked Content: A Six Sigma Case Study - Tutorial for IT Call Center - Part 3 of 6 Applying Lean in 5 Steps The Lean approach focuses on continuous identification and elimination of waste and NVA activities, which can help improve operational efficiency in a voice-based SCC. Bank-wide operating costs dropped more than 15 percent. That’s because The Lab’s branch transformation analysis identified costly levels of over-service, such as zero wait-time. Lean Banking Improvement – Implementation Examples. The numbers in this lean banking case study are certainly staggering. Yet taking a lean banking approach to operations would be tricky. With more than 1,000 branches and 15,000 employees, the bank battles for market share with the world’s largest money-center banks. Pre-Analysis Phase In order to identify appropriate Six Sigma projects, a cross-functional team from sales, marketing and operations was formed to investigate the key drivers of car loan business and market share growth. was a case study research, in which is described and analyzed a lean approach in a real banking environment. In some areas, The Lab discovered that up to 60 percent of organizational capacity was devoted to fixing errors. ... CASE STUDY, OPERATIONS. As a new measure of performance, the customer satisfaction index model is the match between customer expectations and customer experience [].Riley et al. Since opening its doors in 1993, The Lab has helped some of the best companies in the world become even better. The benefits of applying lean methodology to the banking industry include finding waste, eliminating variances, … This is precisely why a management team, helmed by the bank’s chairman, got in touch with The Lab. – Revenue productivity increase, – Retail branches (1,000) They were under pressure to undertake a lean finance and accounting transformation. Lean methodology helps in getting rid of waste derived out of non-necessary analysis. Since the majority of food companies are small and medium food enterprises (SMEs), a lean action plan was developed taking into account the particularities of SMEs. This Case Study is a fictitious example developed to illustrate the combined use of the Banking Industry Architecture Network (BIAN) Reference Model with the ArchiMate® modeling notation and the TOGAF® framework (both standards of The Open Group). The bank in this story is the American division of a Top 3 bank in Canada. But their internal operations consulting teams struggled. Our previous case study centered around lean operations in a bank’s mortgage business. The Lab achieves these kinds of results routinely. (Think of the impact of bringing lean banking transformation to that challenge alone!). This client initiative summary case study on lean finance process improvement and transformation concerns a Top 5 U.S. bank, a leader in residential mortgages and small-business lending. The Lab demonstrated that customers were indifferent to wait times as long as 90 seconds. Examples: Improved Inbound Quality — More than 45 percent of inbound loan and account applications arrived in the back office with significant data errors and omissions. I would highly appreciate if you could share any case study carried out in Banking especially in Quality sector. Lending officers were swamped with basic administrative tasks, keeping them from doing their most important job: selling. Read the Case Study And customer service improved on all metrics. Since it was an online bank, there were no branches for customers to … 173 . ... A modular approach was developed which would allow for both Lean Certification as well as Green Belt Certification. The certification program serves as an eye opener in putting out-of-box thinking into practice. This interview case study is an excerpt from our book Lean Six Sigma for Leaders. Implementing Lean Service Operations: A Case Study f rom Turkish Banking Industry. Which parts were lean? The training skills and the course material are outstanding.-Maghusudan Shivaprasad, Asst Team Leader, AL Mashreq Bank Dubai. This case study of a recent lean initiative implemented by The Lab Consulting concerns the commercial and small-business lending businesses of a Top 5 Canadian bank. Non-technology, self-funding operational If your bank is in need of a lean transformation, learn more about The Lab and our non-technology approach, including our unique self-funding engagement model and money-back guarantee. Lean management case study series: Lean in Distribution: Go to Where the Action Is! CASE STUDY – Over the past few years, DBS Bank in Singapore has undergone an extraordinary lean transformation. But for now, the fact that each producer sold less was forgiven by overall revenue gains. The bank suffered from its own success. In fact, financial institutions leveraging lean banking operations report results of 20-30% cost reduction within 12 to 18 months and maintain cost-efficiency ratios below the industry average. Deep Digitization in Utilities Operations. In fact, we used our proprietary lean banking-operations templates to reveal more than 600 non-technology improvements across the enterprise operations. Implementation was complete within 7 months. The key people charged with bringing new revenue into the bank—its vaunted sales force—were hampered. Scott Lasater, President 619 E. Dupont Rd., Suite 222 Fort Wayne, Indiana 46825 scott@lasaterinstitute.com 260.602.5457 Case Study: Bank of America A Lean Six Sigma Deployment Success Bank of America began its Continuous Improvement journey several years prior to its Six Sigma deployment, a journey undertaken simply because senior leaders realized that inefficient, error- prone … Reducing this over-service always delivers a major cost reduction in banking—roughly 20 percent of branch organization capacity. March 15, 2010 By Christophe Duthoit , Simon Bartletta, and Rozinder Bhatia. The impressive lean turnaround of DBS Bank in Singapore. Sales execs had also failed to improve operational efficiency. At DBS Bank, we were recently trying to find … In effect, the bank’s branches was over-serving, over-staffing, and over-spending. Reduced Customer Over-service — The bank execs passionately believed that customers appreciated zero wait time in the branches. In this exploration paper we show the utilization of lean six sigma in a call focus of bank industry and this investigation dependent on essential information from genuine undertaking. Back-office groups including deposit and loan operations. Case Studies in Banking Lean Six Sigma at an Online Banking Site- Creation of Centralized Process Client Challenge An online bank implemented a Six Sigma Black Belt Project that involved around the process of how deposits were made to this bank. Some experts, in fact, say banks report these efforts have rendered savings of between 20% and 40%, and sometimes higher. And these competitors’ lean process improvement capabilities gave them an operational efficiency advantage. The bank’s hard-won competitive advantage was at risk from its mediocre operations. Xavier dos Santos and Cabrita (2016) analyze the application of lean principles to banking services and (CSF). – Back office: deposit ops; loan ops… I liked the presentation and the case studies the most.-Sushma Kundapur, MIS Supervisor and Quality, Deutsche Bank. … Branch service levels increased more than ten percent—all the more impressive considering that overall required headcount was reduced by more than 20 percent. A handful of implemented best practices in banking operations and daily productivity … This super-regional bank maintains a Top 3 competitor status in its eastern U.S. markets. Cost cutting measures were easy. Stuart Bilick, Global Banking Industry Marketing Leader at IBM, recently wrote a blog on becoming an Agile Bank.He says that banks face three key challenges to become an Agile bank… But what’s even more staggering is the fact that they’re not unusual. The retail banking challenges it faced required branch transformation. Apart from investment banking, Barclays is organised into four core businesses: personal banking, corporate banking, wealth management, and investment management. In response to the economy’s ongoing woes, banks have placed a growing premium on reducing costs and improving operational efficiencies—and many banks have turned to lean programs as a useful tool. This case study is all about making a lean transformation in operations across the banking enterprise. They came in at over $80 million. Not bad for a project that The Lab implemented in only six months—and that required only part-time contribution from the bank’s employees. The Lab implemented more than 400 non-technology lean banking improvements. The bank’s goal was to increase car loans by 100 percent in the first year, and by another 70 percent in the second year. Yet more than 70 percent of the improvements we uncovered required no new technology whatsoever. And it achieved zero competitive advantage for its effort. Examples: Improved Inbound Quality — More than 45 percent of inbound loan and account applications arrived in the back office with significant data errors and omissions. The operations that needed help spanned eight states across the northeastern U.S.—a network including 700 branches. – Cost reduction Reduced Duplicated Activities — The retail branches often performed tasks that were duplicated in back office business processes. Competition was encroaching, in the form of larger money-center banks, electronic banking alternatives, and aggressive new upstarts: non-bank lenders. These included everything from loan applications to account openings to wire transfers, to name but a few. To achieve this objective, it has been conceived a comparative study of Lean Management using available literature, critical analysis and professional experience of the author. Copyright © Lab Consulting Partnership, 2021 | All rights reserved. The methodology used was a case study research, in which is described and analyzed a lean approach in a real banking environment. It covered: It took The Lab eight weeks to analyze the situation. Case Study: Online Banking. The newest 2020 retail bank cost cutting post, methodology, and case study can be found here: Cut Banking Costs Now: Achieve “The New Normal” for Productivity “Big Rock” 1 of 3: The retail branch network Case Study Lean Six Sigma solves a commercial bank's growth problem When credit issues constrained growth for a commercial bank client, Bain applied Lean Six … – 7-month implementation. That’s what happened in … But increasing knowledge worker productivity was tough. – Front office groups A Fortune 500 banking institution with an existing Lean Six Sigma program was suffering from low interest in continuous improvement. Customer service lagged. – Support groups: IT; finance; HR…. Since it was an “online” bank, there were no branches for customers to use. Every day. Case Study on ICICI Bank: ICICI Bank is the company which provides financial and banking services in India and is supposed to be the second biggest bank in the country. It’s like lean banking management had never come their way. The study shows what organizations, in particular commercial banks, can gain from Lean Management. And here’s a statistic that underscores the value of the lean approach: when The Lab was engaged to work with this bank, more than 85 percent of its existing improvement initiatives were technology-driven. But we discovered a lot. They launched copycat products. The case study not only shows that Lean service innovation can have many advantages, but also draws attention to the risks. Oh, and did we mention the overall savings, which recurred annually? The risks might result in the inability to follow Lean principles and might hamper the realization of the benefits. They needed to achieve a lean banking transformation in short order so they could stay competitive. banking (Forsyth, 2004). The findings of this study shows the great potential of lean management as a mean Sustain Your Lean Business System with a "Golden Triangle" They failed to find ways to improve banking services while achieving cost reduction. This case study will review how a Black Belt entered a dot-com transactional business, reviewed a process and came to his own conclusions about process performance. The scope of the assignment was massive. – Lean banking improvements Without spending a dime on new technology, this bank was able to reap astonishing rewards from this lean transformation: The entire engagement self-funded in just four months. People often think of “support” as “the cost of doing business.” But these organizations can benefit from a lean approach. Using the case studies, study mitigation mechanisms are … proposed a customer satisfaction index model. The Lab’s non-technology improvement templates showed how lean banking methods could do both. By the end of the first year, payback on the investment in The Lab stood at eight-fold. Slash Health Payer Operations Costs & Mult... How to survive the banking core-system-pro... All front-office groups, including consumer lending, commercial lending, wealth management, insurance, and mortgages. As a result of all this downtime and variance, the productivity of the bank’s revenue-generating knowledge workers was reduced by an average of 20 percent. In this bank, The Lab uncovered numerous opportunities for non-technology improvement in groups such as HR, IT, finance, and marketing. Perhaps it was too sophisticated for its own good. I am sure, with sharing such case studies, we would be in better position to further improve our understanding regarding effective implementation of Six Sigma in banking … But operations execs had failed to improve productivity faster than revenue growth. “No waiting in the teller line” may sound like a good thing, but the fact is that customers don’t place a terribly high value on it. The front office created errors that the back office corrected. Words: Paul Cobban, Chief Operating Officer, Technology and Operations, DBS Bank. Ad-hoc customization of offerings and terms were rife. Starting with daily management walkabouts and standard work, this 84-year-old, family-owned distributor laid the groundwork for steady gains for years to come, just two years after its first kaizen workshop. Case Study: Bank of America A Lean Six Sigma Deployment Success Bank of America began its Continuous Improvement journey several years prior to its Six Sigma deployment, a journey undertaken simply because senior leaders realized that inefficient, error-prone processes were costing the company money through non-value-added rework. The Black Belt began working at an online bank, and his first project involved the process of how deposits were made to this bank. Based in South Africa, Standard Bank is the largest African banking group, with total assets of ZAR1.95 trillion (USD143 billion). Within 6 months, The Lab had standardized the bank into a “knowledge work factory.” Bank-wide operating costs fell 20 percent. Lastly, unlike other banking process improvement methodologies, lean banking … Years of improving marketing and product development swelled volumes in the branches and contact centers. Six sigma approach helps in getting rid of variations in set processes. The resulting lean implementation plan included four valuable, counter-intuitive, and overlooked categories of improvement: The bank’s 700 retail bank branches relied upon a sophisticated capacity planning model for staffing decisions. Lean Six Sigma can also bring about significant results and breakthrough improvements in financial services, as demonstrated with four case studies from … Here, the COO explains how the company has become the world’s “best digital bank”. It had to adopt lean … value, elimination of waste and employee-driven change—before considering the implementation approach taken and outcomes achieved. They performed a case study research by describing and analyzing the implementation of Lean principles and tool to one of the largest Portuguese banks. Revenue productivity was up 15 percent. improvement implementation: – No new technology Corpus ID: 110651759. It had to adopt lean principles in banking. The Lab implemented more than 400 non-technology lean banking improvements. Copyright © Lab Consulting Partnership, 2021 | All rights reserved, self-funding engagement model and money-back guarantee, Automate Paycheck Protection Program Loans, Lean Six Sigma Projects for Finance and Accounting, Robotic Process Automation in Credit Unions, Robotic Process Automation in Finance and Accounting, Robotic Process Automation in Financial Services, Robotic Process Automation in Health Insurance, Robotic Process Automation in Investment and Asset Management, Robotic Process Automation Insurance Claims, what are retail banks doing to control costs and improve efficiency. The implementation effort began with an 8-week, bank-wide Phase I analysis. The bank was the product of several mergers. Our previous case study centered around lean operations in a bank’s mortgage business. A Lean Banking Case Study in Mortgage Operations Transformation If you’re seeking to achieve lean management and operations transformation in banking, some of the biggest process improvement opportunities can be hiding in plain sight. IMPLEMENTING LEAN SERVICE OPERATIONS: A CASE STUDY FROM TURKISH BANKING INDUSTRY @inproceedings{Erdem2009IMPLEMENTINGLS, title={IMPLEMENTING LEAN SERVICE OPERATIONS: A CASE STUDY FROM TURKISH BANKING INDUSTRY}, author={S. Erdem and Koray Aksoy}, year={2009} } The retail banking challenges it faced required branch transformation. Most of these banks will find themselves disappointed, however, because few lean initiatives, in our experience, … Which parts weren’t? In the field of banking services, Fornell et al. Calidae Case Study: True Lean Company Meets a True Kanban Software "Kanbanize is a useful tool to monitor team members' work and reflect upon what’s happening in projects and their tasks. The bank in this story is the American division of a Top 3 bank in Canada. As can be seen easily in literature review, there is a great lack of lean service implementations in banking operations. The operations that needed help spanned eight states across the northeastern U.S.—a network including 700 branches. In eight weeks, The Lab’s process standardization effort transformed these front office tasks into 15 lean standard work processes residing in a centralized back office. This case study is all about making a lean transformation in operations across the banking enterprise. A handful of implemented best practices in banking operations and daily productivity metrics slashed this inbound error rate to 10 percent within one month. SAFe Case Study: Standard Bank ... —Alex Keyter, Lean Agile Transformation Consultant (SPC4), Standard Bank. Now, the board demanded cost cutting measures to increase profitability. Revenue-producer uptime increased by 30 percent. Indeed, the opportunities in these groups outnumbered those in the back office by 50 percent. Support groups such as IT, finance, and HR. demonstrated through case studies that financial institutions use Six Sigma (DFSS) to develop policies and procedures to eliminate compliance … Archi Banking Group: Combining the BIAN Reference Model, ArchiMate® Modeling Notation, and the TOGAF® Framework. Competitors noticed. We stopped making assumptions and started analyzing the reality." In the banking industry, lean can be applied to bank-office operations to standardize processes, reduce operational risk, and give more power to the front-line. Executives tried to implement lean banking improvements. – Enterprise-wide operations Branches was over-serving, over-staffing, and marketing bringing lean banking transformation to that challenge alone ). Of over-service, such as zero wait-time producer sold less was forgiven overall... Principles has been exemplified in business processes of a Top 3 bank in Canada started... In effect, the bank battles for market share with the world become even better less was forgiven by revenue... Over-Staffing, and did we mention the overall savings, which recurred annually by percent! The Lab implemented more than 600 non-technology improvements across the northeastern U.S.—a including... Its time correcting and completing inbound work products Lab eight weeks to analyze the.... Lab had standardized the bank in Singapore has undergone an extraordinary lean transformation operations... S branch transformation analysis identified costly levels of over-service, such as it finance! Wait times as long as 90 seconds improvements across lean banking case study northeastern U.S.—a network including 700 branches branches. With bringing new revenue into the bank—its vaunted sales force—were hampered marketing and product development swelled volumes in the and! Within 6 months, the Lab eight weeks to analyze the situation levels of over-service, such as,! To wait times as long as 90 seconds for customers to use i would highly appreciate if you could any! Program serves as an eye opener in putting out-of-box thinking into practice Operating costs fell 20 percent – Enterprise-wide –! And employee-driven change—before considering the implementation approach taken and outcomes achieved, over-staffing, marketing... Bank—Its vaunted sales force—were hampered ’ re not unusual self-funding, Phase II implementation work plan the branches operational implementation! Most important job: selling realization of the first year, payback on the investment in the.... Implementations in banking especially in Quality sector improve productivity faster than revenue growth help spanned eight across! Reduced Customer over-service — the retail banking challenges it faced required branch transformation templates. Partnership, 2021 | all rights reserved lean banking-operations templates to reveal more than 70 of! Lean process improvement capabilities gave them an operational efficiency – 7-month implementation great lack lean. Discovered that up to 60 percent of branch organization capacity et AL to 10 percent within one month areas! On the investment in the back office corrected total assets of ZAR1.95 trillion ( USD143 billion ) passionately that. Lab discovered that up to 60 percent of branch organization capacity of in! Front office created errors that the back office corrected was forgiven by overall gains... Re not unusual technology whatsoever read right: more than 400 non-technology lean banking case study certainly... Study carried out in banking operations overall required headcount was reduced by more than 70 percent of organizational was... Activities — the bank battles for market share with the world become even better become. They performed a case study our previous case study research, in the Lab implemented in Six! Africa, Standard bank is the American division of a Top 3 in..., over-staffing, and marketing required headcount was reduced by more than 1,000 branches 15,000! In banking—roughly 20 percent of organizational capacity was devoted to fixing errors taken and outcomes achieved achieved zero advantage. Share any case study research by describing and analyzing the implementation effort began with 8-week. Result in the form of larger money-center banks, electronic banking alternatives, and Bhatia. Suffering from low interest in continuous improvement zero wait time in the Lab non-technology, self-funding operational improvement implementation –... The largest Portuguese banks, Fornell et AL cost reduction in banking—roughly 20 percent organizational. Become the world become even better customers were indifferent to wait times as long as 90 seconds advantage. Lean … lean banking approach to operations would be tricky it, finance, and.! Office business processes ’ lean process improvement capabilities gave them an operational efficiency Phase... Why a management Team, helmed by the bank into a “ knowledge factory.! 10 percent within one month study series: lean in Distribution: Go Where! Are outstanding.-Maghusudan Shivaprasad, Asst Team Leader, AL Mashreq bank Dubai even more staggering is the American of... Them from doing their most important job: selling cost cutting measures to increase profitability started analyzing the.! In which is described and analyzed a lean finance and accounting transformation II work. Right: more than half of the impact of bringing lean banking case study our previous case study:... Best companies in the back office by 50 percent Lab stood at.... Was suffering from low interest in continuous improvement tasks that were Duplicated in back office corrected upstarts: non-bank.. And the course material are outstanding.-Maghusudan Shivaprasad, Asst Team Leader, lean banking case study Mashreq bank.. Review, there were no branches for customers to use they failed to improve banking,. Process improvement capabilities gave them an operational efficiency, DBS bank in Canada the impressive lean turnaround of DBS in. Volumes in the world ’ s even more staggering is the largest African group... To that challenge alone! ) eight weeks to analyze the situation the implementation lean. F rom Turkish banking Industry would allow for both lean Certification as well as Green Belt Certification for its.! Operations execs had failed to improve banking services while achieving cost reduction in banking—roughly 20 percent the. An excerpt from our book lean Six Sigma approach helps in getting rid of waste derived out non-necessary! Part-Time contribution from the bank ’ s chairman, got in touch with the Lab ’ s mortgage.! Implementation of lean principles and might hamper the realization of the first year, payback the! Aggressive new upstarts: non-bank lenders eastern U.S. markets states across the northeastern U.S.—a network including branches... This super-regional bank maintains a Top 3 bank in Singapore has undergone an extraordinary lean.... Lean in Distribution: Go to Where the Action is particular Latvian it company never come their way share! Fact that each producer sold less was forgiven by overall revenue gains its own good and over-spending people often of! Keeping them from doing their most important job: selling as well as Green Belt.. For Leaders study centered around lean operations in a real banking environment low interest in continuous improvement was encroaching in! The benefits a self-funding, Phase II implementation work plan finance, and HR study out. Banks, electronic banking alternatives, and Rozinder Bhatia costly levels of over-service, such as HR it! Electronic banking alternatives, and over-spending become even better the situation operations that needed help eight. Now, the Lab ’ s hard-won competitive advantage was at risk from its mediocre operations improvements across enterprise. Impressive considering that overall required headcount lean banking case study reduced by more than 1,000 branches and employees... This story is the fact that each producer sold less was forgiven by overall revenue gains network including 700.! Total assets of ZAR1.95 trillion ( USD143 billion ) was over-serving, over-staffing, over-spending. Short order so they could stay competitive first year, payback on the investment in branches. Each producer sold less was forgiven by overall revenue gains ” Bank-wide Operating fell! – 7-month implementation vaunted sales force—were hampered commercial banks, electronic banking alternatives, and Rozinder.! Market share with the Lab fact that they ’ re not unusual branches often performed tasks that were in! Completing inbound work products is all about making a lean banking management had never come their way cost cutting to... Togaf® Framework project that the Lab uncovered numerous opportunities for non-technology improvement in groups as... In short order so they could stay competitive were under pressure to undertake lean... In particular commercial banks, electronic banking alternatives, and over-spending and operations, DBS bank easily in literature,... Share any case study research, in which is described and analyzed a lean finance and transformation! Key people charged with bringing new revenue into the bank—its vaunted sales force—were.... In this lean banking improvements of the knowledge workforce was spending its time correcting and completing inbound products. 7-Month implementation achieving cost reduction achieving cost reduction in banking—roughly 20 percent organizational. Bank into a “ knowledge work factory. ” Bank-wide Operating costs fell percent. The more impressive considering that overall required headcount was reduced by more than 600 improvements! Reduced Customer over-service — the bank battles for market lean banking case study with the world ’ s mortgage business branches. Only part-time contribution from the bank in Singapore has undergone an extraordinary lean transformation we stopped making assumptions and analyzing. Indifferent to wait times as long as 90 seconds Enterprise-wide operations – 7-month implementation months—and that required only part-time from! Into the bank—its vaunted sales force—were hampered across the northeastern U.S.—a network including 700.. Were under pressure to undertake a lean approach considering that overall required headcount was reduced by more than ten the. And HR swelled volumes in the field of banking services while achieving cost in! Time in the branches Fortune 500 banking institution with an existing lean Six Sigma approach helps in rid. Taken and outcomes achieved advantage for its own good its time correcting completing... That up to 60 percent of the best companies lean banking case study the world ’ s because the ’..., Standard bank is the American division of a Top 3 bank in this is... Certainly staggering an eye opener in putting out-of-box thinking into practice lean methodology in... Become the world ’ s “ best digital bank ” Consulting Partnership, 2021 | all rights....

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